88% of companies say they benefit from faster payments

Late payments the a FREQUENTLY ISSUES for businesses, especially small to medium-sized businesses (SMBs) struggled with cash flow.

As payment delays persist, businesses are turning to faster payment solutions to ease financial pressure, improve operations and strengthen supplier relationships.

the PYMNTS Intelligence report “Need for Speed: Faster Payments Are Key to Businesses’ Financial Health” found that instant payment like real-time transfers helps companies manage cash flowreduce delays and improve B2B connections.

The Effect of Late Payments on Cash Flow

Late payments affect the financial health of businesses. The report revealed that 51% of suppliers said they received payment after the due date. Consider that 57% of invoices are paid late, with 33% taking more than 90 days to settle. Almost 30% of small business owners cite delayed payments as a top challengeand on the professional services sector, the average payment time in 2023 almost 48 days, with about a third of payments taking at least 60 days.

These delays cause disruption to accounts receivable (AR). Businesses that allow more than 30 days for invoice payment are 57% more likely to face serious AR challenges. If payments take more than 90 days, businesses struggling to meet operating expenses and may have to seek alternative, often expensive, sources of financing.

Faster Payouts: A Solution for Cash Flow Management

Real-time payment solutions, such as same day ACH transfer, helping businesses improve cash flow and maintain stronger financial positions. According to the report, 88% of companies using faster payment options report business growth, with SMBs benefiting from healthier balance sheets. In addition, 54% of employees of mid-sized and large companies found real-time payments effective for overdue payments, while 32% said they improved cash flow management.

The availability of these payment solutions is expanding. New collaboration between FinTechs like Jack Henry and actionsas well as Goodbye and InvoiceASAP, help SMBs adopt digital paymentsincluding same day fund transfer. These partnerships improve cash flow for small businesses, offering faster, fee-free transactions that improve financial health.

Real-Time Payments Improve Business Relationships

Faster payments help maintain strong business relationships. Instant payment not only helps improve operational efficiency but also building trust and goodwill between buyers and suppliers. According to the report, two-thirds of SMBs more likely to continue doing business with companies that offer instant payments. Additionally, 89% of major retailers, 91% of manufacturers and 80% of insurers report that offering real-time payments has improved their relationships with suppliers.

Globally, real-time payments are becoming more widespread. For example, Visayanof Fellowship with revolution allows businesses to transfer funds across 78 countries in less than 30 minutes, supporting seamless cross-border transactions. As companies recognize the benefits of faster payments, adopting these solutions will help them improve their cash flow and strengthen their business relationships.

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